Supply Chain Sustainability

$9.4 billion total spend with contractors and suppliers in 2019Sustainability is integral to our procurement processes and supplier engagement. We have identified sustainability questions to be used in bids and performance indicators and will continue to enhance processes and engage our suppliers to identify and manage risks and increase productivity and efficiency within the supply chain. We are committed to supporting business opportunities and capacity building for local and diverse suppliers in our own operations and through our supply chain. 

2019 Total Spend by Segment 2019 Total Spend by Category

Engaging with Suppliers

As we integrate sustainable development into our key business activities, suppliers play a significant role. From constructing our facilities to providing well services and supplying equipment, how they manage their impact on the environment and community is important to us and can affect our performance. 

We regularly engage our suppliers through Business Reviews, Supplier Relationship Management, Supplier Sustainability Forum and supplier audits to: 

  • Review the ConocoPhillips sustainability governance system and asses how we can work with suppliers.
  • Identify sustainable development opportunities and risks in the extended supply chains of critical categories.
  • Share best practices for building supplier capacity throughout the supply chain.

We conduct all contracting and procurement activities in an ethical manner in accordance with our Supply Chain Standard and applicable laws. We require suppliers to comply with certain requirements as a condition of business and to be guided by the principles and standards set forth in the ConocoPhillips Code of Business Ethics and Conduct and their own ethics and conduct policies. Our Code of Business Ethics and Conduct: Expectations of Suppliers provides additional clarity to our suppliers regarding our expectations in these areas:

Health, Safety and Environment (HSE) Suppliers must comply with applicable environmental laws and regulations and conduct business with respect and care for  the environment, including utilizing energy and natural resources efficiently and managing waste, emissions and discharges responsibly.
Labor and Human Rights We conduct our business consistently with the human rights philosophy expressed in the Universal Declaration of Human Rights and the International Labour Organization Declaration on Fundamental Principles and Rights at Work and expect suppliers and contractors working on our behalf to be guided by these principles.  
Integrity Contracts require that suppliers be guided in their performance for ConocoPhillips by the principles and standards set forth in the ConocoPhillips Code of Business Ethics and Conduct and their own ethics and conduct policies.
Social Performance We engage with suppliers and contractors on sustainable development issues through our Quarterly Business Reviews, Supplier Relationship Management, Supplier Sustainability Forum and supplier audits.

Additionally, our contract templates have contractual requirements for:

  • Ethics.
  • The U.S. Foreign Corrupt Practices Act (FCPA).
  • Export compliance.
  • Sustainability and HSE.

By collaborating with suppliers, we can identify activities in their operations and extended supply chains that have environmental and social impacts and guide how they manage those impacts. Read more about how we worked with a supplier in Norway in 2019 to reduce greenhouse gas emissions.

In 2019, we focused on continued engagement with key suppliers. One key element was hosting a supplier sustainability forum with over 65 suppliers from more than 35 different companies, as well as ConocoPhillips representatives from across the globe. The agenda included short presentations and panel discussions and was designed to facilitate sharing of sustainability best practices that are transferable throughout our diverse supply chains. Topics discussed included innovation and efficiency specifically in water management and air emissions. Companies also shared emerging technologies in their respective sectors. Collaborating with our suppliers to identify and manage risks, foster supplier inclusion, and increase productivity and efficiency allows us to mutually improve our sustainability performance.

We also engaged with major suppliers on standardized environmental key performance indicators (KPIs) to ensure alignment with our environmental, social and governance (ESG) performance objectives. Annual review meetings also clarify performance expectations, track results and identify continuous improvement opportunities.

Local Content and Employment

We emphasize promoting supplier capacity building in our procurement, and we expect our suppliers to do the same. We also place a high priority on purchasing goods and services locally and are committed to giving local contractors and suppliers the opportunity to participate in projects and operating requirements, generally through a competitive bidding process. We also seek opportunities to develop local suppliers and promote local hiring as appropriate to meet business needs. Read more about how we are creating shared value in communities.

Supplier Diversity

We expect to do business with qualified suppliers that share our values, whether minority-owned, women-owned, small business enterprises, or global, local or Indigenous suppliers around the world. In the U.S., we do business with diverse companies and continue to give them access to business opportunities through our Supplier Diversity Program. This approach attracts qualified suppliers, stimulates local economic development, and creates long-lasting social and economic benefits in our stakeholder communities. We support Veteran-owned companies and track our spending with Veteran-owned suppliers. In the U.S., our 2019 Supplier Diversity program totaled $827 million spent with businesses owned by Veterans, minorities, women, members of the LGBT community, service-disabled people and historically underutilized businesses (HUBs). Additionally, ConocoPhillips had $702 million in expenditures with small businesses.

Through our Supplier Diversity program, we actively participate in certifying and developing diverse and small local businesses in the United States.

Local Employment
  • Business unit, asset or project plans include support for local employment as appropriate.
  • Where appropriate, social investment initiatives support the strengthening of local capacity to respond to employment needs.
Local Procurement
  • Business unit, asset or project plans include support for local procurement and providing opportunities for local contractors and suppliers, and investment in supplier capacity building as appropriate.
Local Business Development
  • Certain business units support local business development initiatives or "incubators."
  • Where appropriate, social investment initiatives support strengthening of local business development.

Read more about supplier diversity efforts in our Lower 48 business unit.

Sustainable Procurement

The supply chain function contributes to the company’s sustainable development commitments by integrating sustainability issues into our processes and procedures. This incorporates sustainability thinking into our source-to-settle process, from sourcing goods and services through to the payment process.

Supplier Expectations

  • Integrity
  • Labor and Human Rights
  • Environmental Sustainability
  • Supplier Inclusion

Supplier Qualification

  • Pre-qualification Questionnaire

Strategic Sourcing and Category Management

  • Request for Information
  • Bids
  • Category Risk Assessment

Contract Delivery

  • Key Performance Indicators
  • Supplier Audits

Integrating oversight on labor and human rights into our procurement processes and procedures includes recommended questions for supplier prequalification, bids and audits, as well as contract language. The questions and contracts directly address these issues and are based on our commitment to conduct our business consistent with the human rights philosophy expressed in the Universal Declaration of Human Rights and the International Labor Organization Declaration on Fundamental Principles and Rights at Work as described in our Code of Business Ethics and Conduct and our Supplier Expectations. We recognize slavery and human trafficking likely exist in every country. We are committed to the California Transparency in Supply Chains Act of 2010 and the United Kingdom Modern Slavery Act 2015.